Exxon Mobil Corp. XOM +0.33% said Monday it plans to spend $50 billion to expand its business in the U.S. in the next five years, investments that were “enhanced” by the American tax overhaul.
The Texas-based energy giant didn’t specify whether the investment plan represented an increase in spending as a result of the tax rewrite passed by Congress and signed into law by President Donald Trump late last year, or how much of the $50 billion was tied to prospects Exxon was considering before the tax changes.
Exxon Chief Executive Darren Woods made the announcement in a blog post, adding that the company was still studying whether the tax overhaul made additional investment more economically viable.
“We’re actively evaluating the impact of the lower tax rate on the economics of several other projects currently in the planning stages to further expand our facilities along the Gulf Coast,” Mr. Woods said in the post.
He singled out drilling operations in West Texas and New Mexico as areas where Exxon will be investing billions to boost production. The company has been planning to step up its spending levels in that region for years.
Last year, Exxon spent almost $6 billion to vastly expand its holdings in that area, and the company promised to more than triple its production in the Permian basin and North Dakota through 2025.
Exxon is well known for meticulously planning its build-out of oil and gas projects all over the world, evaluating multibillion-dollar opportunities over many years before making a final decision.
Last year, Exxon said it would spend between $23 billion and $27 billion a year globally from 2018 to 2020. The announcement Monday equates to about $10 billion a year in the U.S. for five years. In 2016 and 2017, Exxon spent about $6 billion a year on U.S. investments, according to the company and analyst estimates.
The $50 billion figure disclosed Monday includes about $15 billion in previously announced projects, such as an initiative to invest $20 billion over a decade along the U.S. Gulf Coast, according to Exxon spokesman Scott Silvestri.
It may be years before the full impact of the new tax law is apparent on Exxon’s strategic planning, but Mr. Woods made clear the company sees the tax cuts in extremely positive terms.